Matalan shares plunge 40%

Shares in discount retailer Matalan plunged 40% as the market reacted negatively to a Christmas trading update from the company, one of the UK retail sectors star performers in recent months.

The stock, whose recent stellar rise had put it on the verge of entry into the FTSE 100 index, were down 276 1/2p lower at 450 1/2p.

In its statement, Matalan said sales in the six weeks to 6 January rose by 16.3% on a same-store basis, but warned that margins in the 19 weeks since the half year were slightly lower than the year before.